John McGahern, who has died from cancer, aged 71, was arguably the most important Irish novelist since Samuel Beckett. Although he had many rivals in the field of short story writing (most notably William Trevor), his novels The Barracks (1963), The Dark (1965), The Leavetaking (1974), The Pornographer (1979), Amongst Women (1990), shortlisted for the Booker prize, and That They May Face the Rising Sun (2002) constitute a portrait of a society moving from insular repression (in the earlier writing) towards freedom and self-confidence (in the latter).

The son of a police officer and a school teacher, McGahern grew up in Leitrim, midwest Ireland, which eventually became his home and the milieu for much of his writing. He gained an English degree from University College Dublin, then qualified as a teacher, teaching at a national school in Dublin. While he was taking a sabbatical as a result of winning an Arts Council fellowship for The Barracks (which was removed from the local library in his village), The Dark was banned by the Irish board of censorship, and he was told not to resume his teaching position. He defied the instruction, resumed his job and was dismissed on the instructions of the Catholic Archbishop of Dublin, John Charles McQuaid.

Even in the mid-1960s the social and cultural stigma attached to the author of a banned book was enormous. Moreover, McGahern had, in 1965, also committed the solecism of marrying a Finnish theatre director, Annikki Laaksi, which had contributed to the refusal of his trade union to fight his case. He later recorded that he was told: "If it was just the auld book, we might have been able to do something for you, but with marrying this foreign woman you have turned yourself into a hopeless case." Having won the fellowship and the memorial award commemorating the Irish writer George Russell, he joked that he was the nearest thing to an "official" writer, and that a ban was therefore that much more bizarre. It certainly made him a cause celebre, with many Irish writers campaigning for his reinstatement. Beckett offered assistance, but McGahern declined.

But the effect on McGahern was shattering, and he went abroad for almost a decade before returning to a small farm in Leitrim, near his birthplace. He attributed his subsequent introspection and partial withdrawal from society to the ban and dismissal, but the autobiographical nature of The Barracks and The Dark had already set the tone for his major themes: domestic interiors (in every sense of the word), the relationships of men to women and of parents to children, and the mindscape of traditionalist rural Ireland. The Leavetaking, which followed this decade of silence, was perhaps marred by his personal despair and was radically revised in 1984, prefaced by the author's appraisal that "the crudity I was attempting to portray had itself become blatant". Despite the pervasive note of despair and entrapment, there was some light in the tautly disciplined prose, which suggests at least the idea of hope and even redemption. He strove for what he called "that inner formality or calm that all writing, no matter what it is attempting, must possess", and when his characters also achieve that calm, the architecture of the work and its human and physical contours become one.

As his work progressed, the early anxieties faded: in his masterpiece, Amongst Women, and his last book of fiction, That They May Face the Rising Sun, he depicts lives that can be lived on their own terms, rather than by those of family or environment.

His short stories, collected in one volume in 1992, are sparse, incisive portraits of pastoral psychology. One, Korea, became a feature film, directed by Cathal Black (1995). McGahern has frequently been described as an "existentialist" writer, in the sense that he permits his characters to transcend the religious, social and sexual inhibitions of post-independence Ireland, and the same could be said of his career.

That he depicts people who have largely agreed to live lives of "quiet desperation" underlines the fact that he, and a few of his characters, most notably Michael Moran in Amongst Women, could deal with desperation by absorbing and transmuting it into something approaching a celebration: "The best of life is life lived quietly, where nothing happens but our calm journey through the day, where change is imperceptible and the precious life is everything."

Last year, McGahern, who had cancer, published his autobiographical Memoir, which deals mainly with his childhood and gives a new dimension to his writing: the ambiguity and necessary pretence of the fiction writer gave way to the unequivocal obiter dicta of the child.

His intense attachment to his mother, his incomprehension at her early death from cancer and at the fact that his authoritarian father provided no occasion for grieving, are unnerving signposts to the mindset that permeates The Barracks and The Dark, which are also uncomplaining accounts of the social and economic realities of rural Irish life in the 1930s and 40s. Anticipating death he wrote: "Those who are dying are marked not only by themselves but by the world they are losing."

McGahern also wrote plays for radio, including Sinclair (1971); and for television, including Swallows (1975) and The Rockingham Shoot (1987). His stage play The Power Of Darkness (adapted from Tolstoy) was produced by the Abbey Theatre in Dublin in 1991.

He received many honours, including the Irish-American Foundation award, the Irish Times/Aer Lingus fiction prize and an honorary doctorate from Trinity College Dublin, and was a Chevalier des Arts et des Lettres. In 2003, he donated his archive, including the manuscript of an unpublished novel, to University College Galway.

He is survived by his second wife, Madeline Green.

Frances Byrnes writes: I first commissioned John McGahern to write a story for BBC Radio 4, which he called Love of the World. He accused me of making it read like a thriller, as we cut his luminous prose from 79 minutes to the required 28.

He gave its last words to a mother who outlived all her daughters. How did she live with such loss, wondered the narrator. She replied: "What else could I do? I was in life." All the letters that John wrote to me ended with a description of the seasons by his lake: the rowanberries were come; the daffodils were "almost unbearably beautiful". These patterns of nature seemed to hold and ease him.

Though he was tone deaf - and considered himself unmusical - he wrote with the measure of music. I breathed in time to his writing. He was contradictory though: a private gossip, both kind and ferocious. When we recorded his Memoir as Radio 4's Book of the Week this winter, he wrote a blessing on my copy of it. He read on air, too, with the intonation of a priest, but he teased and regaled me and the sound recordist with all kinds of scurrility.

In his book That They May Face the Rising Sun, he refers to a lamb that was lost, dying on the smallholding of the central character, like a child that was not had. Last week I was in Sligo. We kept alive an abandoned newborn lamb, and I kept saying to the people I was with that I couldn't get John McGahern out of my mind.